AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 236
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....rder u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 passed by the National E-Assessment Centre, Delhi, ["the AO" or "the NeAC" for short] by invoking the provisions of section 263 of the Income Tax Act, 1961 ["the Act" for short] in violation of principles of Natural Justice. 2.1. In the facts and circumstances of the case and in law, the CIT erred in revising the assessment order passed by the A0/ NeAC u/s 143(3) r.w.s. 144B of the Act by invoking the provisions of section 263 of the Act. 2.2. While doing so the Ld. CIT failed to appreciate: (a) The necessary pre-conditions for initiation and completion of a revision u/s 263 of the Act were not fulfilled in the present case; (b) The order sought to be revised by the CIT in the present case was neither erroneous nor prejudicial to the interests of the Revenue and in fact the entire exemption u/s 11 has been denied by the Ld. AO and therefore there is no question of any prejudice caused to the Revenue in this regard; (c) The order sought to be revised by the CIT was passed by the Ld. AO after making the necessary enquiries and due application of mind to the facts and evidences so prod....
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....s business activity and not in charitable nature. The issue was never adjudicated by the ld.AO in the assessment order. So, the expenses of "Goa Fest" is directed to further verification and setting aside the assessment order as erroneous & prejudicial to the revenue. Being aggrieve don revision order U/s 263 the assessee filed an appeal before us. 4. The ld. AR argued and filed written submission which is kept in the record. The ld.ARargued that the assessee is covered it's own case ITA No. 2072/MUM/2016 date of pronouncement 01.03.2019. So, the invoking Section 263 of the Act is unjustified. The ld. AR respectfully relie don different judgements and submitted his submission which is reproduced as below: - Sr. No. Particulars Ex. Nos. 1. PROPOSITIONS 1: At the outset, it is submitted that no prejudice is caused to the revenue pursuant to the assessment order u/s 143(3) passed by the Assessment Unit, National Faceless Assessment Centre [NFAC" for short] because the entire exemption u/s 11 as claimed by the Assessee [the Appellant herein] has been denied by the Assessing Officer. 2. PROPOSITION 2: The issue on which the Ld. CIT invoked section....
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....lhi) (Trib.) wherein it was held that, "Merely because from a perfectionist point of view, it is felt that some more enquiries and verifications could have been made by Assessing Officer while making assessment/assessment order cannot be declared to be erroneous and prejudicial to interest of revenue..."] In fact, it has been held that, "Where an Assessing Officer acting in accordance with law passes some order, same cannot be branded as erroneous by the Commissioner if he is of other view or in the opinion of the Commissioner the order passed by the Assessing Officer is weak or should have made detailed order. Section 263 does not visualize a case of substitution of judgement of Commissioner for that the Assessing Officer who passed the order, unless the order of Assessing Officer is held to be erroneous causing prejudice to the interest of revenue..." [Ref. Allied Engineers v/s CIT (Karnal) - (2009) 180 Taxman 70 (Del) (Mag)]. 7. PROPOSITION 7: An Assessee cannot be worse off by approaching the Honourable Tribunal. Further, the Honourable Tribunal cannot improve upon the order of the commissioner passed u/s 263. 8. PROPOSITION 8: In the pr....
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.... Fest are divided into members and non-members subscriptions whereas the expenditure is not identified as such attributable to members and non-members. Therefore, the assessee's case is to be considered as that of an entity engaged in commercial/business activity and the receipts are to be brought to tax accordingly. Further the claim of exemption u/s 11 need to be examined by the AO in light of the nature of activity undertaken by the assessee. 10. In view of the facts and circumstances on record, I am satisfied that the AO has not verified the impugned issues. This non verification renders the assessment order dated 23.04.2021 is erroneous in so far as it was prejudicial to the interest of revenue with in the meaning of Explanation 2 to Section 263 of the Act reproduced above. 11. Hence, by virtue of powers vested in the undersigned vide the provisions of Section 263 of the Income Tax Act, the assessment order u/s 143(3) r.w.s. 144B of the Act dated 23.04.2021 is set aside for denovo assessment. The assessing officer is hereby directed to conduct the assessment proceedings and examine the issue of applicability of provisions of section 2(15) of the Act and a....
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....er Section 263 is concerned, the issue stands concluded, in the light of the amendment with effect from 1989, by insertion of Explanation (c) to Section 263 (1). The non-consideration of the larger claim for Rs. 298.93 crores as depreciation and the consideration of only a part of it (Rs. 644,81,091) by the assessing officer, who did not go into the issue with respect to the whole amount, was an error, that could be corrected under Section 263. Aruba (supra) is decisive, in that the provision of Section 263 (1) Explanation (c) was introduced to cater to precisely this kind of mischief. 16. On the aspect of show cause notice, i.e., the second and third questions framed, the court is of the opinion that the ruling in Amitabh Bachhan (supra) is decisive; it upholds the power of the Commissioner to consider all aspects which were the subject matter of the AO's order, if in his opinion, they are erroneous, despite the assessee's appeal on that or some other aspect. The Court held that: "Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudic....